Landlords who lease their rental properties in residential areas of Waterloo have concerns that a new bylaw requiring them to have a licence is too restrictive for them and their prospective tenants.

On May 9, Waterloo city council approved a rental housing licensing program and bylaw, which will come into effect April 1, 2012. The new bylaw addresses rental housing in low-density areas of the city and attempts to “limit the impact of large rental units on residential neighbourhoods.”

Critics say it’s an attempt to prevent the development of “student ghettos” in one of the fastest growing cities in Canada, which also happens to be home to two universities and several colleges. But city officials insist the intent is to create a system to ensure safe accommodation for all renters in the city, even though they are not including highrise buildings in the bylaw.

A spokesperson for the Ontario Landlord Association says it will discourage small property owners in the city from renting out their properties.

“They are avoiding the big apartment buildings where most of the building violations occur,” says Stuart Henderson of the Ontario Landlord Association, adding a provision in the bylaw that will see increased inspections by city bylaw officials is an invasion of privacy for tenants.

“Our primary concern is the impact it will have on the supply of housing and particularly for the most marginalized groups who are protected by the Human Rights Code,” Hall says.

If landlords feel that paying licensing fees is going to be an added cost and bring an additional layer of bureaucracy they don’t want to deal with, landlords may decide to take their rental units off the market, Hall says, further reducing the available units available for rent.

She is also concerned that the Waterloo bylaw and others like it in London and Oshawa seem to target students in particular, who live in low-density housing off campus. The bylaws are also popping up in cities with large post-secondary populations.

“One of our concerns with these bylaws is what the real purpose is and whether it is really a safety and security issue,” Hall says. “What is the real goal here? Health and safety is often the stated goal, but if I have a three- or four-bedroom house and I have my family living with me with several children and aging parents, do we have a safety and security issue too? There are a lot of unanswered questions,” says Hall.

There will be five types of licences available to Residential Rental Business owners in Waterloo and owners will have to renew it annually. A police record check is required as is proof of ownership; a floor plan illustrating the size of each room being rented, and a parking plan for each residence.

The licence categories are as follows:

• Class A: Houses with four bedrooms or less.

• Class B: Owner-occupied houses with four bedrooms or less.

• Class C: Houses with five or more bedrooms considered boarding houses.

• Class D: Currently licensed lodging, or rooming houses (this transitional licence is lost upon resale).

• Class E: Temporary rental unit up to 36 months but not renewable. (For example, granted when someone is working overseas for an extended period and chooses to rent out their home.)

There are also stipulations set out in the bylaw on how big a bedroom must be. For example, for a Class A licence, each bedroom must be 7 square metres (75 square feet) per occupant, the number of bedrooms must not exceed four and not more than 40 per cent of the rental unit’s gross floor area can be comprised of bedrooms.

For the Class B licence, where the owner also lives in the home, the bedrooms must also be at least 7 square metres (75 square feet) and the number of rooms for rent can’t exceed four.

Fines for failing to follow the regulations under the bylaw will range from $350 to $25,000 for first offence and up to $50,000 for subsequent offences.

Landlords must also take a training session, either in-person or online, in relation to the licence.

The idea is that limiting the number of bedrooms and requiring landlords to be licensed will improve safety for rental tenants in the city.

“There seems to be a feeling that students who have late night keg parties when living next door to families could generate greater complaints and is more difficult to deal with than parties that happen in apartment buildings,” says Hall.

The bylaw is just layering on more red tape on top of bylaws that already attempt to regulate rental housing, such as Property Standards Bylaws, the Building Code Act and the Fire Protection and Prevention Act, says Henderson, who is also a landlord who owns 50 rental units including a three-bedroom semi-detached home which he rents to students near the University of Waterloo.

He says the Residential Tenancy Act also restricts what landlords can do in terms of dealing with tenant behaviour.

“We can’t be harassing tenants. If say you have a three-bedroom home and students decide to bring in more friends to live with them you can’t evict them. We are regulated by that legislation as well,” says Henderson.

His advice to landlords is to understand their rights and the requirements under the law.

“I have tenant students, many who are from overseas and in graduate programs, and I never have a problem. If you’re a responsible landlord and rent to good people there usually isn’t a problem,” he says. “One of the main messages we send to our landlord members is follow the law and know the bylaws.”

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